HC Deb 17 August 1991 vol 195 cc336-8
3. Mr. Michael J. Martin

To ask the Secretary of State for Scotland when he will next meet Strathclyde region to discuss its financial situation; and if he will make a statement.

11. Mr. McAvoy

To ask the Secretary of State for Scotland what plans he has to meet representatives of Strathclyde regional council to discuss the council's financial position.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

The leader of Strathclyde regional council was among representatives of the Convention of Scottish Local Authorities whom I met on 8 July to discuss local government finance issues.

Mr. Martin

The Minister will know that at that meeting Strathclyde conveyed that it used to cost £8 million to collect the rates and that it collected 90 per cent. of them, whereas it is costing £28 million to collect the poll tax and there is a shortfall of £70 million. Does he agree that Strathclyde is a responsible local authority? It has embarked on advertising campaigns to try to get the revenue in. How will the Minister resolve the problem and assist Strathclyde to get the £70 million?

Mr. Stewart

A slowdown in payment levels was inevitable while re-billing took place to reflect the £140 reduction in the headline community charge. Strathclyde issued its revised bills for 1991–92 [Interruption.] [HON. MEMBERS: "Hear, hear."] I am grateful to hon. Members for cheering this important information about Strathclyde regional council. I shall repeat it. Strathclyde issued its revised 1991–92 bills only in mid-June. I assure the hon. Gentleman that we have taken full account of the cash flow position and that Strathclyde regional council and the district councils in Strathclyde have received front-loaded grant payments of £125 million—that is extra grant that they would not otherwise have received until the end of June.

Mr. McAvoy

Strathclyde is facing a financial crisis due to the administrative nightmare of collecting the poll tax. I remind the Under-Secretary of State that the Prime Minister himself said that the poll tax was uncollectable. Does the Under-Secretary accept that he and his Government are responsible for the crisis facing local authorities and will he at least try to ease the burden on councils and people by abolishing the 20 per cent. contribution?

Mr. Stewart

The House has taken a view on this matter and the legislation stands. The authorities have a statutory duty to collect outstanding charges and they have a wide range of powers available to them to do so. I remind the hon. Gentleman that the report of the Public Accounts Commission confirmed the view that authorities have not made full and effective use of their powers.

The House must ask why it is that some authorities, for example Grampian, Fife and Central—all Labour controlled—have collected more than 90 per cent. of their budgeted income for 1989 and more than 85 per cent. for 1991. Unfortunately, those figures have not been repeated by other councils.

Mr. McKelvey

Nevertheless, will the Minister believe me when I tell him that I have just had a panic phone call from my secretary in Kilmarnock to tell me that she is inundated with people telephoning and sending letters because they are desperately worried about the poll tax and the new figures that have just been produced? That anxiety is particularly felt by the elderly. Can the Minister advise the House and me, so that I can advise those people, about precisely what the formula means for the reduction scheme? For a single person household the formula is:

  • B—(S+£52)
For multiple persons it is:
  • (B x C—(S+ [(C — 1) x £52])
All that followed by the poll tax.

Mr. Stewart

I am very sorry to learn that the hon. Gentleman is receiving panic phone calls, particularly over such a simple, straightforward formula. These are matters for the community charge registration officer, but if the hon. Gentleman is in any doubt about some of the details of the formula I shall be happy, of course, to arrange a meeting with him when I can explain it to him further.

Mr. Maxton

When will the Minister accept that it was he and his Government who created the shambles of the poll tax and that it is he and his Government who have the responsibility to clear up the mess that they created? They should stop trying to pass the buck on to everyone else but themselves.

Will the Minister take two immediate courses of action? First, will he now explain to the House why, if it is right to abolish the 20 per cent. payment for the new tax, it is wrong to abolish that payment now? Secondly, will he accept his own liabilities in terms of the tax by paying to Strathclyde region and other regional authorities £140 for every person eligible to pay the poll tax and not just £140 for those who have paid it?

Mr. Stewart

On the hon. Gentleman's first point, the 20 per cent. rule will not apply to the new tax. I have told the House repeatedly that that is a new tax and that the existing legislation stands for the present tax. The hon. Gentleman should start asking why the collection levels vary so much throughout Scotland.

On the hon. Gentleman's final point, I recognise that COSLA desires that the community charge grant should be based on an authority's original payment assumptions rather than on the actual collection rate. I assure the hon. Gentleman that we shall take that into account when we are considering the arrangements for finalising grant payments.